Setting Priorities by Firm Age: 42% of the Youngest Firms Named Credit Availability. At 21 Years or More, 17% Did

Which money problem deserves your attention first? The Federal Reserve asks employers to name theirs, and the list from a two-year-old firm does not read like the list from a twenty-five-year-old one.

You have a limited number of hours and a longer list of things that could sink the month. The priority problem is deciding which of them gets the hours. Any general list of small business money problems will tell you costs, cash, sales and credit, and it will be right, and it will not help you choose.

Sorting by the age of the firm helps a little. The Fed’s survey lets owners name as many challenges as apply, and it publishes the answers by how long the business has been around. Some answers differ a great deal from one end of that range to the other. Some hardly differ at all.

Credit is the widest gap on the list

Across all employer firms in the survey, 29% named credit availability. By age it runs 42%, 38% and 32% for firms under 11 years, then 22%, 23% and 17% for the older three bands. Every one of the three younger bands sits clear of every one of the three older bands once the survey’s 95% confidence intervals are counted.

At the youngest firms, credit is level with weak sales and tariff costs in the middle of the list. At firms 21 or older, it is the least named of the seven challenges and clear of all six others, including debt payments at 25%. If you are in your first few years and access to credit feels like a bigger issue than it does to the owner down the street who has been open for 30, the survey lines up with that.

Costs lead at every age, but not alone at first

Rising costs of goods, services or wages had the highest share in every age band, from 66% at the youngest firms to 79% at firms 11 to 15 years old. For firms under six years, though, that lead does not clear paying operating expenses: 66% against 59% at 0 to 2 years, 70% against 59% at 3 to 5. From six years on, costs stand clear of every other challenge on the list.

Paying operating expenses holds at 59% to 60% through year ten, and firms 21 or older named it at 44%. Uneven cash flow is 53% at the youngest firms and 42% at the oldest. Debt payments and interest rates take a different shape: firms 6 to 10 years old named them at 43%, above all three older bands, and level with the two younger ones.

Weak sales: 44% at the youngest firms, 46% at the oldest, and no two age bands separate.

What to take from this if you run one

Use the list as a check, not a verdict. If you are under six years in, the survey says your peers have operating expenses beside costs at the top of the page, and credit higher than an established firm would have it. If you have been open more than 20 years, your peers have costs clear of everything else, and if credit is on your own short list, that is less common at your age and worth a closer look.

Then pick. You will not fix seven things this quarter. Write down the one that would do the most damage if it stayed where it is, and say out loud what you will leave alone. That call goes better with someone in the room who has run a business and has no stake in your answer.

Three limits worth holding. This is a snapshot of different firms, not the same firms followed over time, and firms that closed are not in it, so it does not show anyone growing out of a problem. Firm age is not separated from firm size: the survey’s size table also shows credit falling, from 31% at firms with 1 to 4 employees to 15% at 50 to 499. And the survey is a weighted convenience sample, and it does not say why these answers differ.

Published by The Lonely Entrepreneur — the community and coaching platform for entrepreneurs who are building alone. lonelyentrepreneur.com

This article is for educational purposes and is not a substitute for professional financial or legal advice.